Fletcher Building Limited · NZX:FBU
Fletcher Building — Merger or Acquisition (December 2010)
30 slides from Fletcher Building's merger presentation, Dec 15, 2010
Slide 1: Offer to shareholders of Crane Group Limited
1 For personal use only Offer to shareholders of Crane Group Limited 15 December 2010 Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 2: Agenda
2 Agenda For personal use only 1. Overview of the Offer 2. Why Crane shareholders should accept the Offer 3. Benefits for Fletcher Building 4. Overview of the Combined Group Appendix: Further details Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 3: 1. Overview of the Offer
3 For personal use only 1. Overview of the Offer Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 4: Summary of the Offer
4 Summary of the Offer For personal use only • Today, on 15 December 2010, Fletcher Building announced its intention to make a takeover Transaction offer to acquire all of the ordinary shares in Crane Group Limited that it does not already own • Fletcher Building hopes to open dialogue with Crane to
Slide 5: Offer highlights for Crane shareholders
5 Offer highlights for Crane shareholders For personal use only Receive a substantial premium for Crane shares – 28% to 1 month VWAP1,2 Values Crane at an attractive valuation multiple – 19x FY11 P/E multiple1,3 Receive cash and become a shareholder in a larger and more diversified Australasia
Slide 6: Attractive transaction for Fletcher Building
6 Attractive transaction for Fletcher Building For personal use only • Building products manufacturing and trade distribution businesses Overview of • Australian and New Zealand operations Crane • Revenue of A$1.86b and EBIT of A$68m1 in FY10 • Pipelines –PE and PVC plastic pipes manufacturing exten
Slide 7: 2. Why Crane shareholders should accept the Offer
7 For personal use only 2. Why Crane shareholders should accept the Offer Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 8: Receive a substantial premium for Crane shares
8 Receive a substantial premium for Crane shares For personal use only The Offer of A$3.43 cash and 1 Fletcher Building share for each Crane Share implies a value of A$9.35 per Crane Share1 Offer premium relative to Crane trading prices measured at 14 December 20102 22% premium 24% premium 28% premi
Slide 9: Offer represents an attractive valuation multiple for Crane
9 Offer represents an attractive valuation multiple for Crane For personal use only The Offer implies a value of A$9.35 per Crane Share1 Crane Offer Crane Offer FY11 P/E Multiple2 FY11 EV/EBIT Multiple2 22% increase 17% increase 19.0x 15.6x 11.8x 10.1x Pre-Announcement Offer Multiple Pre-Announcemen
Slide 10: Become a shareholder in a larger and more diversified company
10 Become a shareholder in a larger and more diversified Australasian For personal use only building materials manufacturing and distribution company Long established history and a track record of strong performance in the building materials industry in Australia and New Zealand FY10 Revenue by Geog
Slide 11: Superior shareholder returns relative to Crane
11 Fletcher Building’s experienced management team and Board of For personal use only Directors have delivered superior shareholder returns relative to Crane Following Fletcher Building’s listing on the ASX and NZX in March 2001, it has produced substantially higher aggregate Total Shareholder Retur
Slide 12: Outperformance in earnings growth and dividends
12 Fletcher Building’s experienced management team and Board of For personal use only Directors have delivered superior shareholder returns relative to Crane The strength of Fletcher Building’s management and operating model is also evident in its outperformance in earnings growth and dividends paid
Slide 13: Enhanced size, equity market presence and liquidity
13 Opportunity to benefit from the enhanced size, equity market For personal use only presence and liquidity of a combined Fletcher Building and Crane By accepting the Offer, Crane Shareholders will have exposure to a company with a significantly larger market capitalisation and considerably more li
Slide 14: 3. Benefits for Fletcher Building
14 For personal use only 3. Benefits for Fletcher Building Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 15: Overview of Crane's businesses
15 Overview of Crane’s businesses For personal use only Crane Division (FY10 in A$m, to nearest million) Aust. NZ Revenue EBIT1 Key Brands Pipelines Manufacturer of plastic pipe (PVC and PE) and accessories Used in various building applications, including: civil works, houses and 505 372 commerc
Slide 16: Attractive transaction for Fletcher Building
16 Attractive transaction for Fletcher Building For personal use only Strategic expansion of 1 Fletcher Building’s Australian portfolio Ability to leverage 2 Fletcher Building’s operating model 3 Satisfies business ownership criteria 4 Attractive financial metrics Presentation to Shareholders | Flet
Slide 17: Strategic expansion of Fletcher Building's Australian portfolio
17 1 Strategic expansion of Fletcher Building’s Australian portfolio For personal use only Strengthens Fletcher Building presence in Australia • Extensive manufacturing and distribution footprint across Australia and Core markets of Australia and NZ New Zealand with over 300 new locations • Combin
Slide 18: Ability to leverage Fletcher Building's operating model
18 2 Ability to leverage Fletcher Building’s operating model For personal use only • Fletcher Building plans to operate Crane as a new independent division within our decentralised divisional structure • Our decentralised business model empowers the executives responsible for each business unit to
Slide 19: Satisfies Fletcher Building's business ownership criteria
19 3 Satisfies Fletcher Building’s business ownership criteria For personal use only Good market positions Recognised brands Favourable industry structures Experienced management Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 20: Attractive financial metrics
20 4 Attractive financial metrics For personal use only • EPS accretion on a pro forma basis – FY10 EPS of 39.6 A¢ps increases to 40.4 A¢ps for the Combined Group 1 • Potential sources of synergies2 include: – Streamlining the corporate functions of Crane to align the functions with those required
Slide 21: 4. Overview of the Combined Group
21 For personal use only 4. Overview of the Combined Group Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 22: Divisional structure of the Combined Group
22 Divisional structure of the Combined Group For personal use only Crane will form a new division within the Combined Group, with its complementary businesses representing strategic extensions of existing Fletcher Building operations COMBINED GROUP Corporate leadership and functions Building Lamina
Slide 23: Strong financial position maintained
23 Strong financial position maintained For personal use only • Following the transaction there will be an increase in Fletcher Building Gearing1 Fletcher Building’s debt levels – Funding cash component of offer from existing 31.1% 33.1% undrawn debt facilities 26.8% – Roll over or refinancing of Cr
Slide 24: Combined Group benefits from expanded shareholder base
24 Combined Group benefits from expanded shareholder base For personal use only • Crane has over 12,000 shareholders that Median Daily Liquidity over the last 12 months to 14 December 2010 (A$m)1 will become shareholders in Fletcher Building under the Offer 9.8 • Crane and Fletcher Building sharehol
Slide 25: Appendix: Further details
25 For personal use only Appendix Further details Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 26: Acquisition valuation and multiples
26 Acquisition valuation and multiples For personal use only Acquisition Metrics1,3 A$ • Implied Offer price of A$9.35 represents an Implied Offer Value $9.35 enterprise value for Crane of A$895m1 (NZ$1,187m2) Total Shares on Issue (m) 79.1 Equity Value $740m Crane Offer multiples of FY11 earnings N
Slide 27: Funding for the transaction
27 Funding for the transaction For personal use only • Fletcher Building will fund the Offer Uses A$m1 NZ$m1 out of existing debt facilities and by Cash Component of Offer 340 451 issuing shares to Crane shareholders Equity Component of Offer 400 530 who accept the Offer Transaction Costs2 12 16 Tot
Slide 28: Summary of Offer conditions
28 Summary of Offer conditions For personal use only • FIRB, OIO, ACCC and NZCC approvals • 90% minimum acceptance condition • No regulatory action • No material adverse change in Crane • No further dividends or distributions (other than for 1H11 up to 22 A¢ps) • S&P ASX 200 index does not decline b
Slide 29: Investor relations contact details
29 Investor relations contact details For personal use only Philip King philip.king@fb.co.nz +64 27 444 0203 +64 9 525 9043 Presentation to Shareholders | Fletcher Building | © 15 December 2010
Slide 30: Important notice
30 Important notice For personal use only NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE U.S. OR TO U.S. PERSONS This presentation does not constitute an offer of any securities for sale in the United States or in any other jurisdiction. The securities offered have n
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